WASHINGTON – The Iron Range wants the federal government to let the sunshine in — or at least Canadian solar panels.
A simmering trade battle could endanger a solar-panel plant that just set up shop in Mountain Iron, Minn., in a region eager for jobs other than the boom-or-bust work in the taconite mines.
The threat to Canadian manufacturer Heliene Inc. is bringing a bipartisan delegation of state lawmakers to Washington to plead with the International Trade Commission not to impose new tariffs on solar panel imports.
"It might put a dagger in the heart of the whole project. We want to make sure that doesn't happen," said Sen. David Tomassoni, DFL-Chisholm, who plans to plead his case directly to the ITC later this month, side by side with state Senate GOP leader Paul Gazelka, a fellow Iron Ranger. "In order for this plant to work in Mountain Iron ... they need to be able to know that they're going to be able to get the product here so they can manufacture the [solar] panels here."
Demand for solar energy is rising, but U.S. solar panel manufacturers are struggling to compete with low-cost operations in Asia. Suniva, a Georgia solar-panel and solar-cell maker, filed for bankruptcy in April, and then petitioned the ITC — an independent federal agency with broad responsibilities on trade matters — to slap tariffs on solar imports.
Another bankrupt solar-panel maker, SolarWorld of Oregon, joined the suit. Both companies are based in the United States but have overseas ownership: Suniva is majority-owned by a company in Hong Kong and SolarWorld's owners are German.
Minnesota's only solar-panel maker of any size — Ten K Solar of Bloomington — announced in May that it was discontinuing its current business. Heliene's operation in Mountain Iron took over a facility vacated by another solar start-up, Silicon Energy, which folded earlier this year.
Heliene, based in Sault Ste. Marie, Ontario, produces the sort of solar panels you see glinting off rooftops and solar arrays. When Silicon Energy, which manufactured panels for Heliene, shut its doors — "leaving their client and employees out in the cold," said company president Martin Pochtaruk — Heliene took over the lease on the facility.
The Iron Range Resources and Rehabilitation Board hopes to invest $10 million on new equipment for the plant, which eventually would employ 25 to 70 workers.
A new kind of fight
The Iron Range is no stranger to trade disputes. Usually it's on the other side, trying to stop cheap foreign steel from glutting the market. The region is only just beginning to fight its way back from a recent market slump that idled half of its mines and threw thousands of people out of work.
This time, the fight is to bring imports in.
"I'd much rather see our friends in Canada helping out" with a new business on the Range "than some of our foreign competitors who have flooded the market with solar in the past," said state Rep. Jason Metsa, DFL-Virginia, who signed on to a letter to the ITC in July against the tariffs. "We're excited for the opportunity to make solar manufacturing work up here on the Iron Range."
State and national groups aren't fans of the tariffs either.
"You have two bankrupt companies that are trying to bring tariffs and change the economics of the entire solar industry," said Abigail Ross Hopper, CEO of Solar Energy Industries Association, a national trade group. "This is an incredibly blunt instrument to use."
David Shaffer, an attorney for the Minnesota Solar Energy Industry Association, said the proposal united the manufacturers and installers in the state trade association in opposition to tariffs and the price hikes that probably would follow.
"It would double the price of panels," he said. "Projects that are now financeable will suddenly be un-financeable."
Some buyers have started stockpiling solar panels, and prices are already starting to rise in anticipation, he said: "I've heard of 20 percent increases, and that's just from the threat of a policy change."
"This is such a big deal, and it might ultimately land in the hands of Donald Trump," he said, noting that tariff recommendations go from the ITC to the president's desk, and the president is free to impose even tougher sanctions than any the agency might recommend. "He might take this an opportunity to deal a blow to renewable energy."
President Trump picked up a lot of votes on the Range, even in places usually considered Democratic strongholds, with his pledge to protect the steel industry and mining jobs. Solar imports might be a tough sell to an administration known for its embrace of the coal and oil industries.
But Range officials see green energy as a natural fit for remote northern Minnesota and part of the region's push for copper-nickel mining.
"Down the road from [the Heliene] plant, you see 10 windmills that are up on Taconite Ridge. You start realizing that there's potential on the Iron Range to fund this," Tomassoni said. "You can't do this new-energy economy without the copper that's in the ground here. Those four and a half tons of copper in the windmill don't just fall out of the sky."
Hearing set for Aug. 15
Right now, Heliene employs 10 or 15 people in Mountain Iron. The old Silicon Energy operation had just five. The company president, Pochtaruk, said Heliene has produced 100 percent more panels in the three months it's been running in Mountain Iron than Silicon Energy did during any of the full years it was in business.
But Heliene builds its solar panels from solar cells primarily made in Asia, which means its bottom line would be hurt badly by any ITC tariff, Pochtaruk said. Sanctions would likely crush the company's plan for a multimillion-dollar expansion, backed by IRRRB funding, that could bump the workforce to 70.
"We are planning to embark on a larger investment, but we can't do it if we can't import [solar] cells," he said. The 7-year-old company's goal, he said, is a "state-of-the-art" plant similar to its plant in Sault Ste. Marie, which employs 75.
The ITC will hold a hearing on the issue on Aug. 15.
jennifer.brooks@startribune.com 202-662-7452
mike.hughlett@startribune.com 612-673-7003
